CFA Practice Question
The following dataset shows the change of a consumption basket over time:
2011 (price/quantity)- Bread: $0.80/52; Milk: $1.24/28
2010 (price/quantity)- Bread: $0.77/50; Milk: $1.22/30
2011 (price/quantity)- Bread: $0.80/52; Milk: $1.24/28
The denominator of the Paasche index should be calculated as ______.
A. $0.77 x 50 + 1.22 x 30
B. $0.80 x 52 + 1.24 x 28
C. $0.77 x 52 + 1.22 x 28
Explanation: A is the denominator of the Laspeyres index and B is the numerator of both.
User Contributed Comments 1
| User | Comment |
|---|---|
| bruffel | We don't actually need to know how to calculate price indices, only how to construct them... |